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An economist has concluded that, near the point of equilibrium, the demand curve and supply curve for one-year discount bonds can be estimated using the following equations:

Bd: Price = -2/5Quantity + 940

Bs: Price = Quantity + 500

a. What is the expected equilibrium price and quantity of bonds in this market?

b. Given your answer to part (a), which is the expected interest rate in this market?

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